NOTE H: BORROWINGS

Outstanding borrowings at December 31 are as follows:

(000's omitted)	2014		2013
FHLB overnight advance	$	338,000	$	141,900
Capital lease obligations		0		13
Subordinated debt held by unconsolidated subsidiary trusts, net of discount of $405 and $430, respectively		102,122		102,097
Total borrowings	$	440,122	$	244,010

FHLB advances are collateralized by a blanket lien on the Company's residential real estate loan portfolio and various investment securities.

The Company undertook a balance sheet restructuring program during the first half of 2013 through the sale of certain longer duration investment securities and retirement of the Company’s existing FHLB term advances. During the first half of 2013, the Company sold securities and utilized the proceeds to retire $501.6 million of FHLB term borrowings with $63.5 million of associated early extinguishments costs.

During December 2013, in response to the issuance of the “Volcker Rule”, the Company sold certain investment securities and utilized the proceeds to retire the remaining $226.4 million FHLB term advances with $23.8 million of associated early extinguishment costs.

Borrowings at December 31, 2014 have contractual maturity dates as follows:

(000's omitted, except rate)	Carrying Value		Weighted-average Rate at December 31, 2014
January 2, 2015	$	338,000		0.32	%
July 31, 2031		24,802		3.81	%
December 15, 2036		77,320		1.89	%
Total	$	440,122		0.79	%

The weighted-average interest rate on borrowings for the years ended December 31, 2014 and 2013 was 0.89% and 2.70%, respectively.

The Company sponsors two business trusts, Community Statutory Trust III and Community Capital Trust IV, of which 100% of the common stock is owned by the Company. The trusts were formed for the purpose of issuing company-obligated mandatorily redeemable preferred securities to third-party investors and investing the proceeds from the sale of such preferred securities solely in junior subordinated debt securities of the Company. The debentures held by each trust are the sole assets of that trust. Distributions on the preferred securities issued by each trust are payable quarterly at a rate per annum equal to the interest rate being earned by the trust on the debentures held by that trust and are recorded as interest expense in the consolidated financial statements. The preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the debentures. The Company has entered into agreements which, taken collectively, fully and unconditionally guarantee the preferred securities subject to the terms of each of the guarantees. The terms of the preferred securities of each trust are as follows:

Issuance		Par		Interest	Maturity	Call
Trust	Date	Amount		Rate	Date	Price
III	7/31/2001	$	24.5 million	3 month LIBOR plus 3.58% (3.81%)	7/31/2031	Par
IV	12/8/2006	$	75 million	3 month LIBOR plus 1.65% (1.89%)	12/15/2036	Par